What Makes RLJ Lodging (RLJ) a New Buy Stock

Core Viewpoint - The upgrade of RLJ Lodging to a Zacks Rank 2 (Buy) reflects a positive outlook on its earnings potential, which could lead to an increase in its stock price [2][5]. Earnings Estimates and Revisions - For the fiscal year ending December 2024, RLJ Lodging is expected to earn $1.53 per share, representing a decrease of 7.8% from the previous year [11]. - Over the past three months, the Zacks Consensus Estimate for RLJ Lodging has increased by 2%, indicating a trend of rising earnings estimates [11]. Zacks Rating System - The Zacks Rank stock-rating system classifies stocks based on earnings estimate revisions, with RLJ Lodging positioned in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns [12][13]. - The Zacks rating system has a strong track record, with Zacks Rank 1 stocks generating an average annual return of +25% since 1988 [7]. Market Impact - The correlation between earnings estimate revisions and stock price movements is significant, as institutional investors often adjust their valuations based on these estimates, leading to stock price fluctuations [3][9]. - The upgrade in RLJ Lodging's rating is indicative of an improvement in its underlying business, which is expected to be recognized by investors through increased stock prices [4].